Friday, 11 July 2014 14:46
New guidance on simplified advice issued by regulator
The FCA has this afternoon published guidance for firms which want to provide simplified advice or sales without a recommendation.
Automated advice is a key feature of the FCA's guidance, which has come about following research.
FCA officials have been carrying out policy work and a thematic review into the growth of new advice models, including simplified advice.
Today's publication pulls together and replaces previous guidance.
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Christopher Woolard, director of policy, risk and research at the FCA, said: "We want to ensure we have innovation in the advisory market and new, lower-cost options available.
"Today, we're aiming to address some of the barriers that firms have identified to offering new, streamlined advisory products.
"We believe that a healthy retail investment market is one in which there are a number of different distribution models to suit a broad range of investors. We want to give firms the confidence to innovate to achieve that."
In particular, the FCA has provided further help for firms interested in offering an automated advice service by clarifying when a personal recommendation is given and shared examples to illustrate the point.
The document provides guidance on the boundaries between a range of investment sales models and advice issued through different media, including social media.
The report looks at firms' attitude to different advice models and describes how firms approached the design of distribution models where customers purchase investments without regulated advice.
Consumer research was conducted as part of this work, focusing on the motivations and experiences of consumers purchasing investments without a personal recommendation.
Automated advice is a key feature of the FCA's guidance, which has come about following research.
FCA officials have been carrying out policy work and a thematic review into the growth of new advice models, including simplified advice.
Today's publication pulls together and replaces previous guidance.
{desktop}{/desktop}{mobile}{/mobile}
Christopher Woolard, director of policy, risk and research at the FCA, said: "We want to ensure we have innovation in the advisory market and new, lower-cost options available.
"Today, we're aiming to address some of the barriers that firms have identified to offering new, streamlined advisory products.
"We believe that a healthy retail investment market is one in which there are a number of different distribution models to suit a broad range of investors. We want to give firms the confidence to innovate to achieve that."
In particular, the FCA has provided further help for firms interested in offering an automated advice service by clarifying when a personal recommendation is given and shared examples to illustrate the point.
The document provides guidance on the boundaries between a range of investment sales models and advice issued through different media, including social media.
The report looks at firms' attitude to different advice models and describes how firms approached the design of distribution models where customers purchase investments without regulated advice.
Consumer research was conducted as part of this work, focusing on the motivations and experiences of consumers purchasing investments without a personal recommendation.
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